WTI Crude Falls to $62.00 Amid Supply Glut Fears and Saudi Output Plans

WTI Crude Slips Toward $62.00 on Supply Concerns

West Texas Intermediate (WTI), the US crude oil benchmark, has fallen to approximately $62.00 during Thursday’s Asian session. Market sentiment turned negative following signals from Saudi Arabia that it may ramp up oil production aggressively, escalating fears of a global oil oversupply.

OPEC+ Increases Production, Saudi Arabia May Go Further

On Saturday, the Organization of the Petroleum Exporting Countries (OPEC) and its partners in OPEC+ confirmed plans to increase output for the second consecutive month. The group aims to expand production by 411,000 barrels per day (bpd) in July, following earlier hikes in May and June.

However, Saudi Arabia is reportedly preparing to boost production even further, according to a Bloomberg report. The move is interpreted as a strategy to discipline OPEC+ members like Iraq and Kazakhstan for exceeding quotas while gaining greater market share. This aggressive stance has pressured oil prices downward.

🔍 Related: Understanding OPEC+ and Its Impact on Crude Oil Prices

EIA Reports Decline in US Oil Inventories

The US Energy Information Administration (EIA) reported a drawdown of 4.304 million barrels in the week ending May 30. Despite the bullish nature of this data, it failed to counterbalance the growing fear of oversupply, particularly as Saudi and OPEC+ output expands.

Geopolitical Tensions May Limit Downside

While oversupply weighs heavily on market sentiment, geopolitical tensions, particularly surrounding Iran, may offer some support for oil prices. Analysts suggest that Iran’s likely rejection of a US nuclear deal could curb the downside for WTI, as tensions may threaten regional stability and potential supply routes.

📰 See also: Geopolitical Factors Affecting Oil Prices

Outlook: Supply-Driven Volatility Ahead

The crude oil market remains highly sensitive to production announcements and geopolitical developments. With Saudi Arabia potentially breaking ranks to raise output and Iran tensions simmering, WTI could see heightened volatility in the days ahead.